Customer Service Trends in Germany
Blog Feature

Customer Service Trends in Germany

The following article comes from Olark contributor Caroline Klein at Bynder, a digital asset management platform.

German companies are under pressure to adapt their customer service to changing customer needs and expectations. They need to understand the influence of digitization on customer service and review new channels and technologies to understand how German customer care can be improved.

Small and mid-size businesses in Germany are adapting to digital trends in customer service and customer support.Photo by Markus Spiske on Unsplash

Digitization of the Mittelstand

In the German economy the so called Mittelstand, small and medium sized companies which are often owner- or family-managed, are a very strong force. More than 99 percent of all German companies are in the Mittelstand bracket. These companies make more than half of the Wertschöpfung (which is loosely translated as domestic product) in Germany, provide almost 60 percent of all jobs in Germany and are renowned for their high quality innovation.

Kurosch Habibi, Managing Director of Carl Finance (an Olark user) thinks despite being innovative, the Mittelstand still has large potential when it comes to digitalization.

"German Mittelstand is a great force of innovation, but many processes or means of communication have not changed for decades," says Habibi. "Our example shows that even highly trust-intensive fields like M&A are steadily moving online. Accordingly, we believe that future means of communication will require a well-coordinated mix of different channels."

In the annual digitization index, the German Mittelstand companies scored only 52 out of 100. The study analysed 64 different criteria from the usage of a own company website to the development of new digital products and services. In the customer relationship category, the Mittelstand scored only 51. This could suggest that the Mittelstand is not yet taking advantage of the state-of-the art technologies that exist in customer service.

Michael Zeif, Head of Customer Service at WirWinzer GmbH says cost optimization, or the price performance ratio, is a main reason why German companies are acting a bit slower. "Many "Mittelstand" companies are known for innovation and quality, but they are also known for, 'Think three times, act once' i.e. build slow but strong. Often this is because German companies are always looking a bit suspiciously at the US and their fast growing companies. Give them a few years or until the customers yell at them to offer new channels."

The German government has recognized the need for the German Mittelstand to adapt to the digital world. Several government initiatives have been formed to assist these companies with digitization. For example, skill centers have been created to provide the companies with digital expertise, as well as “help for self help” schemes. These initiatives could also help to the digitize the Mittelstand’s customer service capabilities in the future.

So even though the Mittelstand are currently lagging behind on the digital front, the fact that they are smaller and more agile than large companies means that they can implement new tech company-wide, faster.

Bret Helenius, Chief Executive Officer, Advantipro GmbH, says the first ones to do so will be giving themselves a sizable competitive advantage. "Our company is a relatively small (under 100 employees). The advantage of a company this size is we are able to adjust to trends and adapt new technologies fairly quickly. We are in the process of going through a technological update throughout the company's processes. I do believe a number of German companies are not using these other methods of customer service."

Germans do not like Chatbots (yet)

When determining whether new technology should be introduced to a company’s customer service offering, it is not only important to look at what other countries or competitors are doing but also whether the customers are ready for this new technology. In particular, chatbots are on the rise, yet Germans are still wary of them.

According to a recent study of over 1,500 online shoppers, more than half of the surveyed people rejected chatbots. Other interesting findings:

  • 61.8% of respondents find chatbots too impersonal
  • 41.3% assume that chatbots are too inaccurate
  • 25.1% find chatbots too complicated, and
  • 23.6% do not see a value in them

Bret says that although they have Germans use their online chat, most chats are from Americans. "Germans are still much more formal in the way they communicate with businesses and a chatbot conflicts with that type of cultural norm. It will be interesting to see if that trend changes over time. My guess is it will, however I suspect it will not be as drastic as it is for Americans due to the cultural difference between the two countries."

Even though the mentioned study showed that Germans are sceptical about chatbots, there are some areas where they can foresee using chatbots in the future. One of those areas was customer service, where 41% of respondents said that they could foresee using them in customer service at some point in the future.

Customers in Germany are still hesitant to try chatbots and are learning to interact with businesses more on live chat for websites.Photo by Camilla Bundgaard on Unsplash

Phone, e-mail and chat are still most relevant channels

Phone, e-mail and chat are still the most used customer service channels in Germany. According to a representative study from a German electricity provider, 80% of the surveyed people prefer the phone and 68% prefer using e-mail when contacting customer service. Only 45% like using social media such as Facebook or twitter to communicate with companies.

Call center experts agree that phone, e-mail and chat will remain essential customer service channels and that web self-service and chat tools will continue to be the most important types of tech used in customer service in 2017.

Bret has seen this on The Find-It Guide, a portal his company designed for Americans that live in Germany (and the rest of Europe) because they are stationed there for the military.

"We still have a number of customers that want to talk to a real person. We have all been hit with an automated operator, and it's no fun," says Bret. "And screaming “Operator” into the phone until your neighbors can hear you is an experience worth forgetting.  Email is still very relevant, even with the deluge of spam that you receive daily.  Chats do offer some instant gratification and although you don’t get to hear the person on the other end, it is nice to know I can get helped now vs waiting to get your problem fixed."

For Germans good customer service means regular availability, fast answers to questions as well as honesty and reliability. Unfortunately those expectations are not always fulfilled, no matter which channel is used. According to the study, 71% still perceive Germany as a Servicewüste, which translated means service desert.

How to digitize the customer experience

There is still room for improvement when it comes to digitizing the customer service experience for German customers. As Diego Maldonado Rosas, Commercial Operations Manager for Spotcap notes, digitization needn't be a daunting process.

"Heavyweights such as Amazon and Google have set the standard for business operations, and they’ve set it high," says Diego. "A constant demand for leaner, faster and more efficient processes, combined with advancing technologies means it is almost impossible for medium-sized businesses to avoid digitalization. When faced with the decision to embrace the digital wave or to ignore it, experience tells us the ‘wait and see approach’ will not serve your business well."

Diego offers five tangible, and affordable, steps to work toward changing processes:

  1. Manage your customer relationships - A simple CRM (Customer Relationship Management) tool will manage interactions between businesses and existing or potential clients. Think of a CRM as a one-stop-shop to house all your client data. It helps prevent chaos.
  2. Get rid of paper-based processes - To go paperless, start by drafting the central process flows for each department, then identify the offline activities of the process that could add more value by going digital.
  3. Use BI data to your advantage - A real-time business intelligence (BI) approach allows management to steer the company by having the relevant information and KPIs at hand. It encourages a data driven culture as all projects will need to show measurable results. At Spotcap, we use Power BI but there are a range of other products on the market.
  4. Manage your knowledge and data - Invest in developing and keeping a Knowledge Management System (KMS) that can centralise your collective knowledge. This makes it possible to share experience, on-board new team members quickly and in general, increase the lifetime value of the hours invested solving past complex problems.
  5. Listen to your customers - It is clear that a business' long-term revenue depends on keeping clients and keeping them satisfied. Feedback collected in a structured way can fix procedures, introduce new products or services and improves a client’s pain points. The Net Promoter Score (NPS) is a solid tool for this purpose. It’s based on one simple question...“How likely are you to recommend {this product or this company} to a friend or colleague?"

About Caroline Klein

Caroline is an Online Marketer at Bynder, a digital asset management vendor based in Amsterdam. She is part of the DACH-team and is responsible for the German Bynder blog.